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asia. we are counting down to the major market open. haidi: treasury yields and oil climbs. morgan stanley says analysts are sticking to publish earnings estimates and like a deer in the headlights. i cap on russian gas in a bid to limit the profits that moscow makes from its energy exports. labeling china a sustain -- nato labeling china a challenge. kathleen: dear in the headlights, i love that statement from morgan stanley. people are just confused about what is going on and what is happening next. last week was the second-best rally for u.s. equities in all of 2022. today, stocks opened higher at the close, they are lower. computers are moving higher a bit again. -- stocks are moving higher a

bit again. people expect more volatility. maybe the worst is over and skeptics say, maybe not. there is an uncertainty here. there was a rise in treasury yields. two options at once. two year notes and five-year. $70 billion, $80 billion. the worst romanticist 2010. -- the worst demand since 2010. a bright spot if you are the oil bubble is that oil futures, the cash market closed two dollars higher. the g10 has said they want to put a cap on russian gas prices and crude prices. they have a meeting, that is a big plus if you want oil to move higher. there is a political rest in libya and ecuador. that is another reason we see

the purplish in oil. haidi: we could see the energy related stocks being boosted in today's session. we see that come down. facing the u.s. headwinds. not giving a positive lead. australian stocks coming off at the biggest daily gain 85 months. -- in five months. coming off of the two year loans. we continue to see treasuries dropping bonds. the recovery and sentiment creating a tug-of-war in bond markets. investors are not sure of the pullback. is it the pullback or a pause? less demand over the past couple of sessions. >> after the nice recap let us

get back to the markets with our contributor, garfield reynolds. how do you expect this to fill -- filter through the markets today? u.s., big rally week, it seems to be a bit uncertain. asian stocks followed. what does your gut tell you about how this is going to play out? could this be another week of gains? >> stocks are likely to creep higher, at least this week. there is plenty of warning, goldman sachs was out recently with what seems very much like a call that earnings are going to come down. analysts have been washing up there -- they expectations.

there has been such huge declines. even when you look after last week, they are a lot lower than they were. there will be bottom feeding going on. the difficulty is that the actual bottom looks to be a lot further away. a lot of the risk factors for that are not until next week. i also have the complications of the u.s. long weekend coming up. we do not get the employment data until the end of last -- next week. the following week after that is u.s. cpi. as biggest risk factor. to add to the fun, when is the date for that and what are the expectations? one economist estimate popped in while i was looking for an 8.8% figure.

that is not beyond the realms of possibility. he would think the equities and bonds would look a little bit sorrier after that than they do now. >> where does that leave equities? the u.s. rates market is in the possibility of a recession. >>. i am quite surprised myself whs are. i see that there is still a lot of them on inverted and that seems strange when there has been such a concern and worry about recession. even with some hints that perhaps the others are getting antsy about how much pain they may have to deliver to the asset markets, even with that, they have been clear that if inflation stays high they will keep hiking and keep hiking aggressively.

those aggressive rate hikes are very much on the table. the fed is acting like it is willing to risk going too far too fast rather than falling back behind the curve on inflation or even behind the curve on inflation. with that, the bonds look vulnerable and that means stocks remain vulnerable. the big drop off in equities and other assets, or it precisely how high heels have gone and the expectation that they will get higher because the fed would be hiking as far as or further than it can be sure to nip inflation in the bud. haidi: leaders of the t7 are said to instruct ministers to

limit price caps on russian gas as they double double tap on the commitment to support ukraine. >> the second day of the summit and president volodymyr zelenskyy joined leaders and urged them to put penalties on vladimir putin and also continue their support for ukraine. president biden had pledged two president -- to the president he would give them missile-defense systems. we had no missiles hitting kyiv. we had a russian missiles hitting apartment buildings in the center of the country. there is a feeling at angst. leaders want to continue their support and pledging to continue their support ukraine, they are dealing with issues at home. higher inflation, a lot of that has been exacerbated by the war. russia's invasion of ukraine, because of the oil market and

what that means to the price of gasoline and grain. when it comes to gasoline, leaders are negotiating further discussion and will likely be an agreement to have more discussion about an oil price cap. russian crude could stay on the market, but be capped at a price so that russia could not reap the benefits of skyhigh oil prices. kathleen: moving onto nato. labeling china a systemic challenge when alliance leaders meet this week in madrid for a summit. it would be a departure from the previous strategic concept document more than a decade ago. it shows how the geopolitical landscape has changed since russia's invasion of ukraine. let us bring in steven engle in hong kong. steve, how significant is this? did you expect this? did the china and nato waters

expect this? -- watchers expect this? >> nato alliance has circled their wagons and are in lockstep in many ways. what is happening in ukraine, china, that is what is very interesting about this strategic concept document which comes out every decade. the last time was in 2010. it was delayed because of the pandemic and other issues. in 2010, china was not mentioned. russia was labeled for as a potential partner. china is going to be labeled a systemic challenge. there were now as far as -- they are not going as far as to label them an adversary, russia will be called a direct threat. the nato secretary says moscow has chosen confrontation over

dialogue. china is significant and will not be happy about this because repeatedly and more frequently, in recent days, china has been a blessing the united creating a nato like walk in the asia-pacific region with strategic alliances like the quad and biden's visit to south korea and japan. there will be eyebrows raised in beijing. it is not surprising that nato is taking this step given that beijing has a no limit partnership with moscow. it will ratchet up the tensions. haidi: new trade talks between the u.s. and taiwan. >> this was telegraphed by the biden administration as well. when they had the indo pacific economic framework that came out in may when biden came out here. a regional kind of trade, a

rewriting of different rules for the asia-pacific along with like-minded economies. many of the signatories did not want taiwan included because they rely on trade ties with beijing. they do not want to anger beijing buried u.s. telegraphed that if taiwan is not going to be part of it we can perhaps do a more bilateral agreement with taiwan. that is what is happening right now. u.s. officials from the sdr -- u.s. vr has held their inaugural talks about deepening economic and trade ties. this is government speak, these talks between the usdr are designed to advance mutual trade priorities. this is governor talk for it we are sitting down and hashing out our agreements that are different and put in a roadmap for eventual talks to include

taiwan in ipm. kathleen: that is stephen engle. do not miss our life coverage of the ecb forum on central banking in portugal this week it is a big one. will be hearing from global central bankers and economists throughout the event about monetary tightening and of course inflation concerns. that is get to vonnie quinn with the first word headlines. -- let us get to vonnie quinn with first word headlines read . >> keeping prices stable and maximizing employment as well as supporting small businesses and green projects. and what his approach to easing from cutting interest rates from january. china plans to extend trading hours for the yuan. beijing wants to increase

trading as part of a push for global influence. they pledged to further open financial markets. the yuan waiting is in a special caucus. sri lanka is going into virtual lockdown as they limit oil supply. foreign exchanges or at a record low with it struggling to pay for imports of food, medicine, and fuel. the prime minister warns of a complete collapse of the economy as the situation worsens. an american amtrak train has derailed killing three people. it was traveling from los angeles to chicago when it hit a dump truck causing several cars to derail. 255 people were on board. multiple injuries have been reported. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries.

kathleen: still ahead, the nato summit and that the t7 summit and caps on russian oil. both stocks and bonds have potential term downsides. they also increasingly attract yield and return. that is up next. this is bloomberg.

>> and will have a major impact.

an impact on gdp and recession. it is a narrow path and we cannot discuss the possibility of a soft landing. haidi: that is the ceo. the income generation will be one of the best weapons for traders. we have chris with riverfront investment groups. you say it move over tina, and make room for patty. >> that is my lame attempt at coming up with an acronym for the paradigm. a lot of people know that tina stands for there is no alternative. in a world of easing financial conditions, over a loose

monetary policy which is the world from 2009 two the end of 2021, he wanted to own growth oriented securities rate particularly stocks. interest rates are below the rate of inflation and there was an alternative to taking risks on the duration curve. we will do era now. what i say piety, what that stands for is pay attention to the yield. we are in a different era. on certain macroeconomic background -- an uncertain economic background. have positive inflation-adjusted yields in the tipps market. inflation has been stubborn and difficult to control. in an environment like that we think that clipping coupons in the form of dividend yields from safe, high-quality, high cash flow type equities as well as certain parts of the fixed

income world, basically bond that looked like stocks and stocks that look like bonds, high yield. bank loans, floating-rate debt. those instruments will be investor's best friend. the is the strategy. haidi: with all of the uncertainty, getting paid to wait is not a trip -- in a terrible position to be in. you are looking beyond bond proxies. where do you find things that fit into that theme? >> here in the states there is a number of different industries you can find. as a price to a lot of people is energy. and it may be a surprise to us because coming into this year we have been pretty bearish on industry -- energy for the past decade due to the supply and demand characteristics. the energy companies that

survived the oil glut are companies who bought and had assets on the cheap from fallen compatriot companies were not able to survive in a low oil environment. we have become a and strategically. we are think massive free cash flow being generated in the higher-quality energy companies. energy is one of the supply -- surprise places. we are also finding another sector, nothing like energy. health care, farmer, medical devices. high capacity for growth diffidence because the have a big cash flow generation and reasonable valuation. we find in certain consumer facing sectors and also we are finding some of these names in tech. i do not mean the long-duration expensive technology that barely

makes money or does not make money at all. the boring, stodgy, make a cap software and services companies that generate huge cash flow and starting to get the cash flow back to shareholders in the form of dividends. you can find it across the equity spectrum if you know what you are looking for. kathleen: how are you going to gauge at the bottom? everybody said -- talking about tech stocks, big-name for so overvalued. no surprise. now it is down so much you say it has to fall this much more or as markets -- have investors oversold? how do we make that gauge of it not being so conservative and saying i am going to go back and do price appreciation equities? >> that is a great question.

there are a couple of different ways we answer that. the first and basic strategy we use for shorter-term calls is our technical thesis which is based on three rules. do not fight the fed, do not fight the tread, be aware of the extremes. we quantify them. i do not fight the fed. the fed is no longer in the risk taker's camp or side. it is contracting and because mental conditions are titanate, interest rates are rising and monetary supply is changing. it is starting to shrink. in terms of not finding the print, it is down. as a primary trend is evidence by the moving average, down every equity market across the world. beware of the crowded extremes. we do not think it is extreme enough yet for us to call a durable bond. from a technical perspective, we

are on risk management mode which is explaining why we have an elevated level of cash in our portfolios. we think that the dividend themes are viable. even if the equity markets how get cheaper from here and throughout the summer, is high end grown yields offset the capital losses in the quarters to come. kathleen: what is the signal to come back in? >> corporate earnings. it has to stabilize. they cannot go down. we are looking at $220 of earnings. if they come back in, the market is viable. kathleen: that is what i needed to know. moving on to you. you can get a round up of the stories you need to know it ate today's addition of daybreak -- in today's edition of

daybreak. this is bloomberg. ♪

>> we are cracking the font of a global supply chain crunch and these are the top stories today. as french president says the that uae's leader says that oil companies are pumping as much as they can. they only add 1500 barrels a day. ground beef prices are up 36% from a year ago. chicken breast gained by a third. russia's invasion of ukraine has disrupted the global agricultural supply chain. thinking of ways to reduce natural gas demand to avoid

splintering energy markets, supplies from russia tests the unity in response to the war in ukraine. gas price disruptions follow, member countries are stepping up preparation as they seek to refill the depleted storage site. bloomberg terminal users can read more about those words in our newsletter, supply lines on and i trade nl. -- ni trade nl. we hear from elyse, just ahead. this is bloomberg. ♪ ♪ -hi, i'm smokey bear and i made an assistant to help you out.

because only you can prevent wildfires. -hey assistant smokey bear, call me papa bear because i'm "grrr-illing" up dinner. haha, do you get it? -yes. good job. -so, what should i do with all of these coals? -don't just toss them out. put them in a metal container because those embers can start a wildfire. -i understand, the stakes are high.

assistant smokey vo: ha-ha, ha-ha. -see, smokey think's im funny! >> with the low income countries, debt risks and debt crises are not a hypothetical. we are pretty much already

there. it is just that those countries are small and don't grab headlines the way the big emerging markets do. >> that was world bank senior vice president chief economist carmen reinhart speaking to us. as we have the recession risks gripping the market, we see a bit of a down session for asia. chicago nikkei looking pretty flat at the moment. we did have asian stocks gaining the most this month in the previous session, trying to rebound off the two-year low. the dollar steady. we have seen a bit more haven demand. sidney futures unchanged. ozzie stocks with the biggest daily gain in five months. we did see energy in tech as well as financials. energy could still continue to outperform given the rebound. kiwi stocks up by 1/10 of a perceived -- percent. >> talking energy, you make me

think of the past month with wall street analysts, upgrading bullish earning. one strategist says it's time for a reality check. morgan stanley's lisa shalett spoke to our colleague. >> unfortunately, i think our perspective is that this is a classical bear market rally. if you look at things, one of the narratives of bear markets is that you actually have to eliminate on the vast majority of the negative catalyst. the single biggest one is still out there and a recalibration of earnings expectations. if going through this period, the most radical pivot in central-bank history in terms of the speed and magnitude and acceleration of monetary policy. economists have begun to cut their top down economic forecasts for gdp.

yet, fundamental company analysts are sitting there like deer in the headlights not knowing what to do with numbers and we are still looking at corporate earnings expectations that look pending on what sectors you are looking at, 13% to 15% year-over-year profit growth off of 2021, which was an all-time high for operating profit margins and profits of the share of u.s. gdp. we just don't see how we don't get a recalibration here from the analysts that take the e in the pre-ease down. reporter: the old colleague mike wilson wrote this, "falling yield to level prices, last week the markets said the bullish for you may last a few more weeks, perhaps we get another rally from here.:"ultimately went on

to say what you're saying. the pushback i got this morning when i put that work of yours out there with mike wilson was ultimately, however they brought -- how have they brought their earnings down already? why is this the case when these issues are so well understood and so talked about every morning on programs like this? it still has not happened. why not? >> i think there are a couple reasons. first off, there's no doubt that it is an extraordinarily tough environment in which to forecast. i think there's a little bit of a wait and see. i think people are very focused on second and third quarter earnings. the second piece, this is a refinement of how reliant bottom up that analysts have become on

corporate guidance? it is horrifying that there is little productivity among bottoms up analysts to go down on a limb and cut numbers without corporate management telling them exactly what to do. that is problematic in terms of their value proposition to investors because it is not particularly helpful. haidi: morgan stanley wealth management cio lisa shalett. all features extending gains in the age of trading session after a choppy u.s. russian. wti rising above $109 a barrel. some metals rebound on their worst week in a year. let's start off with oil. what are we seeing in terms of the pricing momentum here? reporter: there is a real direction question. we have g7 leaders meeting now.

veteran oil traders are saying expect to see going forward what we seen in the last 12 hours, choppy trading. if we drop it in the bloomberg, while we slid back from the 120 heights, west texas intermediate is starting to bounce off a key technical level and creep back up and lay her on the cross winds. and now as mentioned, weighing a price cap on crude. at the same time we have major oil producers, libya and ecuador, signaling cuts because of political crises. at the same time, the near term demand remains fairly robust. nomura oil is coming but they say it is a nervous trade right now. big picture even though we have west texas creeping up and brent creeping up as well, we have --

will see the first monthly decline for west texas intermediate since november. that is a bit of a trend change. kathleen: metals also on the move. you not only watch commodities as an investment, you watch them as an indicator to signal what is going on in the world. reporter: and 10 is leading the group of base metals higher, infect rebounding from the worst week in a year. all of this because of china's optimism. china is the biggest base metals market. it is -- it's economy is starting to improve as it lifts covid-19 measures. this is amid rising fears of a global industrial slowdown. if you are wondering and you don't track metals, i thought these were flying high, they were a year and a half or two years ago because of the

pandemic. but there's a view that the worst of it is over. 10 is reduced at 21% weekly loss, nickel, aluminum and copper all have risen as we look at the three and five day charts. they are reversing last week's decline. then you have goldman sachs weighing in on the bigger picture. base metals decline over the past few weeks has almost everything to do with the liquidation across all markets rather than fundamental issues. still he expects price pressures will likely linger for a bit to come. kathleen: bloomberg's su keenan updating us on the commodities market. let's get to vonnie quinn with first word headlines. reporter: thank you. nato is planning to boost the size of its high alert force to 300,000 troops. that is about a sevenfold increase. this is part of the biggest overhauled since the cold war, and set to be signed off on at a meeting in madrid this week. due to will pre-position more

equipment and boost air defenses. the secretary-general says the strategy addresses risks from china. >> our new concept will guard us in an era of strategic competition. i expect it will make clear that allies consider russia as the most significant threat to our security. it will address china for the first time and the challenges that beijing poses to our security, interests, and values. vonnie: nato is set to label china a systemic challenge when outlines its new policy guidelines this week. the so-called strategic concept document highlights the deepening partnership between beijing and russia. it is due to be signed off on by leaders in madrid. we were also told china would not be called an adversary.

china central bank has pledged to maintain a supportive monetary policy to help the economy recover. the pboc will prioritize keeping prices stable and maximizing employment as well as supporting small businesses and green projects. the pboc has taken a modest approach to easing this year, refraining from cutting policy interest rates since january. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: coming up next, g7 nations are set to announce new measures against russian energy. also ditching a pledge to end fossil fuel financing. we discuss that next this is bloomberg. ♪

kathleen: the were in ukraine dominated the g7 summit again as leaders meant for a second day of talks. president zelenskyy spoke by video link and said he wants the were to be over by the end of the year. with us now is sara meger, international relations lecture at the university of melbourne. glad we can join us, expressing unity in support of ukraine as it faces off with russia, this has so many aspects to it. how strong do you sense is the cohesion and commitment to doing

whatever it takes, including more and bigger weapons to get this war over and to make sure that russia leaves ukraine intact? >> as you say, i think unity is a key issue on the agenda for this g7 meeting and leading into the nato summit later this week. i think all the leaders of g7 are committed to this value, showing this united front against what they see as a common aggressor, russia. but i think that we have reason to suspect that while the face of unity is a strong one at the moment i net the g7 perhaps more coherent and we see later in the week at nato, there are some values that are a strain as well even amongst the seven nations. for the moment, while the emphasizing unity and commitment

to the shared agenda of ending russian aggression, i don't think there is actually shared commitment to what it would take militarily to end this war and i don't think they have on their minds the end war that zelenskyy has expressed of ending by the end of the year. kathleen: so why do you say that? where do you see the fishers - -fissures, and is there any sense among the leaders that they are at risk? dr. meger: the european neighbors have some surprisingly reversed foreign policy and taken a more militaristic approach, seeing the danger is much more imminent and on their doorstep. interestingly we saw from the biden administration a couple months ago, in april the defense secretary and foreign secretary saying the goal for the administration was for ukraine to win, but we see biden correcting that at this meeting,

saying they still are emphasizing a diplomatic and negotiated resolution. i think that is perhaps where the tension is going to lie, especially with extension of the promise of perhaps e.u. membership to ukraine. the position of zelenskyy and the ukrainian people is absolutely no negotiation. by this point from the tactics of russia, they have seen that there essentially can be no middle ground. kathleen: so what do you expect from nato then? especially talking about the european nations, whatever stance they take, and stoltenberg has not seemed to be so uniformly behind this idea that ukraine can and should beat russia with enough western support? he has frequently come across too many people who would like to negotiate and get this over with. dr. meger: i think the idea that

we could just send enough weapons to enable ukraine to win against russia as optimistic. so i think a more pragmatic approach we see expressed by some, i think stoltenberg thinks the best most peaceful way is some diplomatic solutions and both sides do militarizing -- d militarizing, but some people are pessimistic because putin has shown himself to be so committed to seeing this through, despite the massive losses they sustained. it remains strategically sort of inconceivable that there is some kind of value to prosecuting this conflict. yet there is the emotional commitment from putin that sees him apparently wanting to win the war at all costs.

haidi: we've seen russia falling the most in where than a century. it is huge in terms of symbolism. this war of attrition that continues despite a lot of best guesses that it should have been over by now. how long can russia continue to exist on the world stage as a pariah? does it get to a point where it becomes an issue? dr. meger: i think it could have been in crete -- previous years but what we are starting to see is a crumbling of the global commitment to this rule spaced international liberal order. we are getting tensions even in these international organizations. for example turkey, a member of nato, exercising veto power

trying to prevent the inclusion of finland and sweden and perhaps blocking nato maneuvers that might support ukraine in the black sea. there's interesting questions in my mind about hungary's involvement in nato and the long relationship with putin. also we see the rising tensions in the east with western countries posturing more and more against china as the next disruptor to this global order. so to me what we might be anticipating is the value frictions becoming more disruptive to the coherence of these international organizations at the same time that we are having increased military buildup. that sort of such things on a knife edge, if you will. haidi: we will have to leave it

there, but great conversation is always. sara meger, international relations lecture at the university of melbourne. the group of seven is set to be moving toward reversing a commitment to halt the financing of overseas fossil fuel products by the end of the year. a proposal is viewed favorably by both members. the u.s. also provided an effort to counter the belt and road initiative. all of this without the head of research. in the context of grantor climate plans, what does it mean for climate goals? >> this is just a euphemism for sacrificing some climate goals. as you mentioned, the initial goals for ending fossil fuel funding by the end of this year has already been essentially dead. the main reason is the reality in europe requires more

investment in infrastructure. they are using this to basically sacrifice all of the climate goals. kathleen: we are also hearing reports japan is pushing for the removal of zero emission vehicle targets from the g7 statements. with europe and their shift, you can push it to the war in ukraine and unexpected pressures but japan doesn't seem to have quite the same "excuse." play are pushing this way? > it is just a reality that japan has fallen behind on zero emission vehicles. last year they only accounted for one point 2% of passenger vehicle sales. whereas the other g7 members have higher adoptions. germany, ev sales accounted for over 26%. it is a little ironic even though japan led and the option

of hybrid vehicles and pioneering the batteries. but unfortunately, automakers have been slower with a few exceptions in adopting ev. kathleen: that was the bloomberg new energy finance head of a pet -- aipac energy. don't miss our conference on the ecb forum in central bank, and portable this week. we will hear about the outlook for central bank monetary policy and inflation concerns. coming up, betting against the bank of japan doesn't usually pay off, but some investors say this time is different. we will find out in our big take, coming up next. this is bloomberg. ♪

kathleen: quick check of the latest business flash headlines. warning it might miss payments on a local moat for the first time, trying fourth biggest property developer had already granted an 18 month extension. the proposal would affect payments through thursday at the end of september on a bond worth almost $600 million. u.s. banks boosting dividends

and share back buybacks in response to their success in clearing this year's stress test. goldman sachs says the dividends will jump 22%. morgan stanley is raising its quarterly stock $.77 per share. it's also operating a new multiyear common equity share repurchase program of up to $20 billion. haidi: the bank of japan says it is committed to keeping yields low despite a mobile push to hike rates, but now investors are doubting the central banks results. i were reporter talks us through what is bloomberg's big take. jp morgan to schroders, some of the world's biggest lining up for the so-called widow maker trade despite the reputation on how the story works out. reporter: investors are circling around the boj. it comes down to the polity diversions story.

the boj is letting everyone from the fed to the rv j to bet against it. at some point the boj will have to tweak or even abandon the policy. you mentioned schroeder's. they are saying japan is the one market telling us to go short. so there is a lineup for people to really say we don't make a trade. kathleen: at some point maybe in the future, but what are the implications to global rates markets here? are they right that the boj will tweak or abandon yield curve control policy may be sooner rather than later? >> surging rates in japan going up higher, it would have implications for dummies,

consumers at the government. it would put the new stress on a global economy already struggling under the weight of soaring energy prices and choked up supply chains. kathleen: that was ruth carson. you can find her wonderful story on the bloomberg terminal or on bloomberg.com. get ready. the market opens in sydney, seoul, and tokyo next. keep it here. you will hear all about it. this is bloomberg. ♪

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kathleen: this is "bloomberg daybreak asia." we are counting down to asia's

major market opens. asian stocks had their best move in a month yesterday, but with stocks falling out of in the u.s., bond yields rising, what day will asian stocks have today? haidi: this bear market loses steam pretty quickly. we see rising crude prices, the return of fear when it comes to treasury markets as well, the push as to whether we see the end of the bear market or whether any of the pricing moves are just a pause. kathleen: let's take a look. we have about eight seconds counting down. the big question is, does the rally fomenting yesterday continue or stall out? investors around the world are asking as the mark critz -- markets are opening in asia and korea. let me take a look, we have the nikkei actually opening a bit lower, one quarter of a percent.

u.s. stocks did manage to rally earlier in the day. we have u.s. futures actually starting a little higher now. we can see the japanese yen -- actually the dollar yen is rising. mostly staying in a range here. a lot of expectations it will continue to weekend. -- weaken. we have the year bond yield, pushing up a little bit as the price falls in the futures market. the u.s. 10 year actually is rallying a little bit, closing just under 320. there were two really bad options in the u.s. and that cloud of less investor demand i think will continue to hang over u.s. bonds. we will see what it does for asia today. haidi: we have really seen asian equities try hard to rebound off the two-year low, but things are

starting to stall. take a look at the open here in australia. this market had the best daily gain in about five months. giving back some of that potentially today. watching financials, energy, and tech. energy continuing to see gains, but at the same time we are seeing australian bond yields rising and the dollar slipping. i next guest says -- our next guest is more worried about a slowdown in china. our next guest is lorraine tan, director of equity research at morningstar asia. where do you put your recession risk fears at this moment? are you more worried about a u.s. recession or slow recovery in china and recession there? >> i would say at this stage, we are probably concerned with, there are two parts. the lockdowns in china, the

recovery from that, those should be more choppy than expected. of course, recession risks are still there in the u.s. and that would obviously impact the global sector. even if we get some china recovery in 2023, which could be a buffer for this region, it will not offset a u.s. or global recession in that sense. haidi: where do you see opportunities and what is your approach at the moment given the uncertainty. >> at this stage, we are actually seeing the best value in terms of estimates and discounts to spare values. so we will look through the cycle which we tend to do it

morningstar and for any investors looking for a three year time horizon, there are opportunities within the technology and consumer discretionary. this is where we would be recommending, most favorably on. there are great companies for strong cash flows. it will be a little choppy in the next few months because of headline risk, so i think there is still room. kathleen: dividends are getting popular all over the world. i want to ask about japan. the bearish bet by hedge funds against japan's nikkei are at their most in four years. it is interesting to me because there seems to be a lot of people who are fairly bullish on

jaman -- japan. where do you come down? >> actually we do like some pockets of companies in japan. i think it comes down to the fact that technology and industrial related things have been shut down and we think there is opportunity. the favorite stories in the medium to long term are the robotics. a lot of people will be shifting more to increasing their use of robotics. kathleen: broadly speaking, there are a lot of other asian countries to look at. last year, korean stocks were on a tear.

if you have to pick another country equity market to look at, who is it? > we would probably have a look at korea, but again we are essentially not looking at market as the whole. that would be the case for all the countries we are looking at. we just like particular pockets of names. one segment in korea we do light would be the banks. kathleen: ok, quickly tell me, not australia? >> australia is a little out of my jurisdiction but there are names we like as well. we would be wary of the energy and commodities space because we do see elevated prices at being not at the price level that can be sustained, in terms of market dynamics, and mid to land -- mid to long-term supply and jaman. that is the immediate concern.

we think a lot of good news is factored into the managing right now. haidi: china has been such a popular inflation hedge from all the uncertainty we see elsewhere. how far along are we in the rebound? are we getting to a point where we see low hanging fruit being taken up now? >> i would still see there are certain sectors that there are still -- there's still room. the big e-commerce is sold down significantly first on regulatory risk and on the slowdown. we think topline growth has been slow over the next five years for most company but we think the share price falls reflect that and we see slightly more supportive regulatory in china. these are names trading half of

their fair value estimates so big names like alibaba, jd.com, so we think that is an opportunity. kathleen: all right, discounted tech names so people are curious about those. thank you, lorraine tan, director of equity research at morningstar. stay with bloomberg tv from our live court -- coverage of the ecb forum in portugal this week. big names from top economists and central bankers about inflation concerns and monetary policy. haidi: let's go to vonnie quinn. vonnie: thank you china central bank has pledged to maintain monetary policy to help the economy recover. the pboc has taken a modest approach to easing this year, refraining from cutting policy

interest rates since january. bloomberg has learned china plans to extend trading hours for the yuan. beijing wants to increase inflation and onshore currency trading as part of a push for global insulin. the pboc pledged in may 2 open financial markets. sri lanka is going into virtual lockdown as it limits fuel supply to only essential services such as health and public transport for two weeks. the foreign exchange reserves at a record low, the country is struggling to pay for imports of food, medicine, and fuel. the prime minister warned last week of a complete collapse of the economy. i u.s. costs -- cross-country amtrak train has derailed, killing at least three. it was traveling from los angeles to chicago when it struck a dump truck, causing several cars to derail. 275 people were on board.

multiple injuries are reported. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. kathleen: still ahead, we assess the impact on bond markets as china's fourth biggest developer warns it might miss payment on a local note. pimco's stephen chang joins us for that. up next, oil extends gains as the g7 pushes for a price cap on russian crude. more on the crutch of supply -- press for supply, next. this is bloomberg. ♪

haidi: let's get a quick look at the energy stocks we are watching across the region. in 10 minutes or so, a sea of green when it comes to oil and energy related stocks. petroleum and australia up over 2%. we see the move with oil rising for a third session, tightening the market even further.

kathleen: speaking of oil, oil futures indeed extending gains in asian trade after a choppy u.s. session where west texas intermediate rose above $109 a barrel. metals rebound from the worst week in a row on optimism. so oil, is it all g7? this would be a pretty powerful move. reporter: we have oil above $110 in asia training -- trading and it is the g7 meeting, but you also have opec-plus leaders meeting later in the week. a lot of veteran traders will tell you what you are now seeing is what has happened in the last 12 hours, choppy trading. you are looking at the bloomberg showing oil is an unfamiliar ground. it is now bouncing off of a key low. there's a lot of questions about direction from here.

there's also a lot of crosswinds. you have the group seven leaders committing to really supporting ukraine in a number of ways. one of the ways is the mowing over the idea of a price cap for russian oil. plus you have two major producers of oil, ecuador and libya, signaling they will have output reductions because of the unrest in their respective countries. layer on the fact that you have demand, very strong right now and concerns about reduced supply. in the words of another oil strategist, it adds up to a very nervous trade going forward. haidi: in the meantime, we see price action when it comes to metals. reporter: tin is a good example. china is the largest base metals market and is seeing a lot of economic recovery as the covid

19 measures easy. you see the bread on the screen because industrial records are on track since the biggest quarterly plunge since the 2008 financial crisis. that is because of the concern over a global recession. we did see a lot of metal prices on a tear to years ago with the start of the pandemic. they took off in the lockdowns but it has been a complete reversal since then. goldman sachs is particularly saying the worst could be over. tin reduced at 21% weekly loss and taking prices down to 15 months. haidi: nato will reportedly label china a systemic -- systemic challenge. it will be a marked departure from the previous strategic concept document more than a decade ago and shows how the political landscape has changed

since russia's invasion of ukraine. let's bring in stephen engle in hong kong. give us context into the significance of this. reporter: i think the context goes back to the last strategic document from nato in 2010. china was not even mentioned. obviously, china is not part of the north atlantic. however, russia was labeled then a partner in 2010. things have changed quite dramatically. sources are telling us in this new strategic concept document that nato will likely sign off on later this week in madrid, russia will be labeled a direct threat and china will be labeled a systemic challenge. what exactly is systemic challenge? it will come down to nato leaders hashing out the wording.

that's probably where they have the biggest sticking points. there are some members who don't want to take out stuff a stance on china as the u.s. would. the wording will be key. again these sources are telling us that beijing will not be labeled an adversary, but the tricky point here is obviously that beijing has this no limits partnership with russia. if nato will be labeling russia a direct threat, then may be guilty by association, beijing is dragged into that. we are hearing a highlight of concern by nato regarding china over cybersecurity, disinformation, control of critical infrastructure and compliance with the rules-based international order. maybe a little watered down wording on china, but it is significant china is added in light of the fact that china recently has complained the

united states is building a nato like bloc in the asia-pacific. kathleen: i guess if somebody wants to make beijing angry, new trade talks between the u.s. and taiwan can do that. reporter: of course, joe biden was in the asia-pacific in may and launched the ipf, indo pacific economic framework. there were a number of different signatories across the asia-pacific. a number of those rejected or did not want taiwan included for fear of damaging trade ties they have with beijing. we got hints the u.s. and biden administration would work out more of a bilateral trade deal with taiwan. we are hearing that the u.s. trade representative's office has left with their taiwan counterparts and began the first stage of discussions on a roadmap on how to build a new

mutually beneficial trade deal between the two. kathleen: chief north asia correspondentkathleen: stephen engle. let's see how futures in europe are opening. we are taking a look at the stock, 50's futures, moving lower. after a fine rally last week in u.s. equities, it carried over to asia trade yesterday for the u.s., the pullback in the u.s. cash market and then a cloud over that. you can see the ms europe index going up a bit. of course the whole sense of what is going on with ukraine and gas prices ahead of the big conference this week, we will hear from lagarde and i will and others, something that traders are watching closely. plenty ahead. this is bloomberg.

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haidi: the world bank says it expects a list of emerging market companies -- countries facing debt to grow as global interest rates rise. we spoke to carmen reinhart about the outlook. >> debt problems, if we look back at the drama of august 1982, when mexico defaulted, we are not at that moment. we are not at the lehman moment. but the list of countries that are facing debt distress or high risk is quickly mounting. the rise in u.s. rates, china, who had been a major lender, had scaled-back lending recently. of course, we have the

uncertainty that the risk on environment we had in the low rate environment might turn into a more permanent or long-lasting risk off which blankets the emerging markets. all of those things add to the debt risks. i would conclude by saying that with the low income countries, debt risk and debt crises are not a hypothetical. we are pretty much already there. it is just that those countries are small and don't grab the headlines. haidi: next month we are coming up to 25 years since the start of the asian financial crisis. in the context of everything you said, do you feel like the region is better place to cope with the next financial crisis? >> it is not going to be an asian style financial crisis.

the asian financial crisis came after a big bonanza, fast growth, surging capital flows, current account deficits. we are not there. look kind of problems we are facing have to do with stagflation, lack of recovery. this recovery has been exceptionally uneven. very different from the recovery of the global financial crisis in which the emerging markets required -- recovered far more quickly than advanced economies, and partly because china was providing an engine of growth. back in the financial crisis that it is not providing now. haidi: there is a concern that given the late nature of reaction to inflationary pressures that inflationary

psychology has already said in and it is following a negative cycle of growth as well. is the fear of entrenched start inflation very real right now? >> it is. it is very real. we are in the early stages. what makes also inflation persistent is when it spills over beyond the goods market and commodity prices that we've already seen. it is when wage pressures start to mount. the week recoveries are mitigating for the time being some wage pressures, but remember in emerging markets, it inflation expectations are not nearly as anchored as they are in advanced economies.

so the inflation concerns are going to be a big factor for em's in general. haidi: -- kathleen: world bank senior vice president and chief economist, carmen reinhart. a quick check of the latest business flash headlines. nike shares fell as it offered a downbeat forecast gross margin and said it was cautious in its outlook for the vital china market. china sales fell 20% in the corridor, worse than analysts expected. covert shutdowns hurt business but executive say they still see china as a long-term growth market and will continue to invest. robinhood shares surged as bloomberg reported the banking tree sds crypto exchange is exploring an acquisition. ftx is delivering internally how to buy the -- app-based brokerage. while they are excited about the prospects, no active m&a

conversations are happening. now that coinbase has fallen 75% in value, goldman sachs has downgraded it to a sell rating as the crypto continues to take a toll. goldman advised them to list in april 2021. coinbase shares tumbled, extending the decline this year to 78%. up next. haidi: the bank of japan is under growing pressure to stabilize the yen wit this is xfinity rewards. our way of showing our appreciation. with rewards of all shapes and sizes. [ cheers ] are we actually going? yes!! and once in a lifetime moments. two tickets to nascar! yes!

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haidi: just about half an hour into the trading session. we are sort of struggling for

direction a little bit. this is the picture as we saw asian stocks trying to rebound off the two-year low. we had a really good session when it comes to australia, actually extending gains. it was the best daily gain in about five months. continuing to see some strength across energy stocks in particular with gains in crude overnight and talks by the g7 to put a cap on russian crude. the kospi also up by about .5% and the nikkei 225 trading pretty much flat at the moment. asia-pacific, we're seeing pretty much a flat picture. looking ahead to the start of trading in china, we had a fall in the nasdaq golden dragon index, potentially downside in that recovery rally we continue to see across chinese equities. kathleen, the yen has been holding steady. seeing a bit of haven demand but so much is the wall of traders against what they believe the boj may. or may not be committed to. . kathleen: a great story, go to

your bloomberg terminal and read this. the bank of japan says it is committed to keeping yields low despite a global push to hike rates. now, investors are doubting the central bank's resolve. ruth carson joins us now to talk about bloomberg's big take which she worked very hard on. it is such an important story from j.p. morgan to schroders. why are some of the world's biggest names in finance lining up once again for the so-called widow maker trade? ruth: it is feeling very much like a showdown against the boj and the markets. it all comes down to the very critical policy divergence story. the boj is standing pat on it ultra dovish stance at a time when the fed and even the rba are raising rates. funds see an opportunity to short japanese government bonds because of it. they are betting that at some point the boj will have to tweak and give up on yield curve

control. schroders as you mentioned says japan is the one market that is telling us to go short. jp morgan is saying the boj will have to adjust policy at some point. there is a real lineup now for the so-called widow maker trade. haidi: what are implications to global rates markets if investors are proven to be right, that the boj will tweak or completely abandon yield curve control? ruth: big implications all around. we see yields rise basically everywhere. so, it would have huge implications on companies, on consumers, on government. it would put renewed stress on the global economy that is already struggling under the weight of energy prices and choked up supply traits. if these are right, they will reap the rewards for short, and they will be a big impact in many corners of the world. haidi: where do we see the direction when it comes to this uncertainty across treasuries

and other sovereign markets at the moment? whether this is the end of the bear market or just a pause. ruth: look, that is the million dollar question. it is a big of a tug-of-war if i can use that phrase, depending on who you speak to. jp morgan in a couple others are saying we are seeing big inflation. so rates really will not go much higher from here. then you have others who are saying no, this is far from it, so to speak, and it's still trying to sell treasuries. at the moment it is 3.2% and we have seen it go higher. it is still stuck in a bit of a funk at the moment. and you know what? we're going to see some rebalancing flows. the picture might be clearer once we get over that hurdle. haidi: senior fx and rates reporter ruth carter. let's get to vonnie quinn with the first word headlines. vonnie: a new paul has found

support for japanese prime minister you kishida falling by nine percentage points in the past two weeks. the nhk survey has support for the government at 50%, down from 59% earlier in the month. more than 40% of respondents saw economic measures as a top concern heading into next month's opera house election. bloomberg has learned g7 leaders are set to instruct ministers to explore implementing a price cap on russian gas. sources the mandate me at the announced at the end of the summit on tuesday as part of efforts to limit russia's profits from energy exports. leaders are also expected to mention a mechanism to cap prices on russian oil. nato is planning to boost the size of its high alert force to 300,000 troops, about a sevenfold increase. the move is part of the alliance's biggest overhaul since the cold war and set to be signed off on at a meeting in madrid this week. nato will prepetition more equipment and boost air defenses.

the secretary-general says the strategy also addresses risks from china. >> our new concept will guide us in an era of strategic competition. i expect it will make clear that allies consider russia as the most significant and direct threat to our security. it will address china for the first time and the challenges that beijing poses to our security interests and values. vonnie: staying with nato, it is set to label china as a systemic challenge and outlines its new policy guidelines this week. the so-called strategic concept document highlights a deepening partnership between beijing and russia. it is due to be signed off on by the nato leaders in madrid. bloomberg has also learned china will not be called an adversary.

global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. kathleen: next, we discusse th outlook for asian bonds with pimco as it puts the odds of a u.s. recession at 40%. this is bloomberg. ♪

haidi: take a look at the play across bond markets this morning. we are seeing australian bonds falling after treasuries declined over week. weak results informing what we saw on the price action for treasuries. volatility is abound as we saw managers continue to rebalance their per oils -- their portfolios into those month-end and quarter-end. 10 year yield, a little bit of a move in australia. also watching south korea, currently not much of a move when it comes to jgb's. also watching the china 10 year yield, as we continue to see encouraged -- interest across the chinese market as some sort of haven demand given all the uncertainty and volatility we see outside of the chinese markets. kathleen: let's get more on fixed income markets with stephen chang, managing director of portfolio manager at pimco. it is great to have you on. so many big question marks

hanging over bond markets globally. group connect th -- connect the dots for me with 10 year treasuries, and we have a federal reserve, regardless of what the markets expect about the fed saying, oh, no need to be so aggressive. in 2023, the median. is something like 3.7%, and the highest dot if 4.7%. does that mean globally if the fed remains aggressive and u.s. yields continue to rise as the fed is willing to put up with? stephen: what we are seeing so far as the bond market experienced quite a lot of volatility as we try to handicap the different dynamics going on in the growth and inflation picture. we tried getting are cyclical outlook as the anti-goldilocks. growth is running too close to zero. we had the gdp now from the

atlanta fed somewhere between zero to .5% for second quarter. meanwhile, the inflation picture is looking like it is being quite elevated. so how the fed would react in that manner, how much more rate hikes can they deliver. they have stated a quite strong attention to keep inflation under check. and so the market has priced in a lot more rate hikes compared to just a few months ago. i think around the world central banks are also reacting the fed might do and what the domestic inflation situation is. and there is a big range of how these different countries are reacting to it. so there are some opportunities to be captured from those divergence. kathleen: where do you see one of the top opportunities in divergence? we talk a lot about u.s. and china. if you are not looking at china, who else is on your radar? stephen: on china, we have been

more constructive at the beginning of the year, but now they have outperformed so much it is a place where we see maybe yields could track up a bit from here despite using monetary policy from the pboc. there might also be increased issuance coming from government issuance on the fiscal side in terms of stimulus. on top you could also see capital flow movement from there. within asia, we have seen certain central banks being less aggressive to those who are much more aggressive. so korea has been on the more aggressive end, australia's perhaps being expected to hike quite a bit more, similar to u.s.. the other end of the spectrum, you might have bank of thailand, that might be going a little slower. in addition, we also have china, which i just described as perhaps easing on the margin, but could be utilizing more on

the fiscal side than the monitoring. haidi: we have seen how yield china dollar bonds have not seen a winning week since april. do you see further pressure and further divergence there? stephen: there's been a big divergence on high-yield and investment-grade in asia. on the high-yield side, it is correlated to the general risk appetite, global credit spread movement, and also worry about some of the general liquidity condition, in addition to some of the more specific sector impact from the likes of china property. so valuations are kind of ratcheting to a very cheap level. on the fundamental side we still need to wait for china, and especially from china macro. we have seen lockdowns period ically over the last few months, the most severe lockdowns and

the shanghai and beijing area. and that has gotten growth expectation lower, gotten less confidence in the economy. and so the high-yield bonds are reacting to that phenomenon. haidi: where else do you see dislocations and their opportunities. you see a higher cash at the moment to have flexibility? stephen: we are seeing exaggerated move. volatility is very high across different market. we're looking through and seeing which market has priced in more in terms of recession odds. and one of the things that we picked up is on looking through the equity market and looking through the currency market and looking through the bond market overall. and depending on your odds about recession, bonds are starting to look quite interesting, so yields have gone up a lot. the starting yield from this point onwards is at a more

attractive level despite some of the inflationary concern. and it's starting to be at a level where it can act as a hedge from other risk-off type of movement. we're also seeing inflation in bonds having corrected quite a lot, and now with real yields all in the positive territory, you also get adjusted for cpi in your coupon payout. so that could be a reasonable hedge as well. haidi: stephen chang from pimco, we appreciate your time. as hong kong marks 25 years under chinese rule, we are going to focus on how it's economy has changed with its relationship is deepened. let's get more from our coanchor. what are you watching? david: a lot of things. i just had a look at the data. visitor arrivals from the mainland, about 20 years ago we were at about 300,000 to 500,000

a month. that has gone up to -- mainland china was already hong kong's biggest trading partner. last year, that went up to about 326 billion. as you can see, the gap between that and the second biggest trading partner was japan. it is now singapore. that has also widened substantially. the deposit base, let me leave you with this. it has gone up four times. obviously housing prices as a function of also demand, partly from mainland investors. if you put your money in the property market in 1997, he would have made double. if you put it during the sars bottom, you would have made about six times. so, congrats to nobody, i guess. kathleen: hindsight. i wish i was listening to you

where all those other figures were in place. for more content on china go to bloomberg.com. we look at the territory's last 25 years and what lies ahead. what lies ahead here, as we a witty china and hong kong open, china stocks are approaching a bull market as investors catch up on gains. more on that soon. ♪

kathleen: a quick check of the latest headlines. u.s. banks are boosting dividends and share buybacks in response to their success in clearing this year's a stress test. goldman sachs says its quarterly dividend will jump 25%. morgan stanley is raising its quarterly stock dividend to $.77 a share. it is authorizing a new multiyear common equity share repurchase program of up to $20 billion. netflix saying it looks to asia after its shock first quarter slowdown. seeking to maintain growth in the one region where it is still adding subscribers. its regional business develop and had told bloomberg its investment in the market will keep growing. its asia strategy has seen bouncing out saturation in north america and europe. global wafers is planning to build a semi conductor facility

in the u.s. that will be the biggest of its kind on american soil as the country contends with a global shortage of chips. the company will produce 300 millimeters silicon wafer is at the plant, with first production expected in 2025. construction is expected to start later this year in texas. top gun maverick has passed $1 billion in global ticket sales, making it the highest grossing film ever for after tom cruise, and marks the best year for the studio since 2014. the film has grossed more than $520 million in north america and more than $486 million elsewhere. haidi: we are seeing some decent gains across the board as we see the extension of that rebound rally that we had in asia. asian stocks had their best day of the month yesterday, really bouncing back off this two-year low for regional equities. australian continues to extend

marginally those gains that's all the best day in about five men's for the asx 200. nikkei 225 up about .2% as we see gains for the kospi as well. energy stocks in particular seeing some pretty robust gains as we continue to see gains. the rebound in crude as well as the g7 meeting to decide putting a cap on russian crude prices. kathleen: let's dive deeper into china's property sector as it continues to miss bond payments at a record rate. china credit editor kevin kingsbury joins us from hong kong. what is the latest in this ongoing financial soap opera, if you will? kevin: it is obviously one of the latest avella purse to run into trouble. it is the fourth largest in sales. in may they first defaulted on dollar bond. last week the key onshore unit said it would probably not be

able to make a principal payment on a bond already extended three months ago. monday the company said there are some revised terms we would like bondholders to look over and approve so we do not have to put out so much money both on thursday went an initial bond payment is due and then again september 30. when we go back to thursday we are going to wait and see where these bondholders stand and whether they will allow another extension to allow sunac to cut their principal payments for now and be able to add to those payments later on. haidi: what are the implications for the broader credit market? do we see contagion at all? kevin: there have been a little bit of science. some onshore bonds of property developers within the past week have gone upwards of 20%. there was a sunac bond itself that is lightly traded and fell about 15% yesterday. so we are seeing some signs of problems with the onshore

property bonds that we had not seen previously where the market really is quite illiquid. there is not a lot of trading generally. the prices have by and large held up better than dollar bonds have but we are seeing a little bit of onshore traders pricing in a little more risk than they had been. kathleen: -- haidi: kevin kingsbury there. let's get more on the broader chinese markets. mainland stocks closing in on a bull market. for more we are joined by the manager -- how close are we to reaching some sort of fair value, or are there still opportunities seen ni -- in this market? lianting: it does seem to be a strong sentiment which is a fear of losing out. we have seen hedge funds which

did not buy any chinese stocks in the first quarter and are now buying into the market. to answer your question there is a little bit of momentum still if you look at various data points including northbound flow and trading turnover. those have been hitting very high levels in recent weeks. if you also look at technical levels, things are overheating a little bit. if you look at the 14 day relative strength index we just hit 70 which indicates the level of the index at the overbought level. kathleen: a tech investor announced it is selling some tencent shares in an orderly manner. what does that mean for the chinese text? -- tech sector? lianting: tencent's major shareholder seem to have timed the market pretty well and setting down their holdings of tencent. they sold once in march 2018 and another time in april 2021, and both times tencent shares seem

to have peaked. interestingly, if you look elsewhere, insiders are selling not just tencent other stocks. we just saw a report that jd.com's founder is cashing out about $1 billion from the e-commerce giant. so it does seem like the big rally in chinese stocks is providing a little bit of opportunity for insiders to cash out. so if we see of more such activity, that would put pressure on all tech sector. kathleen: now some stocks to watch in the next hour, we will continue to track asian energy companies as g7 leaders exploring the implementation of a price cap on russian gas, as that news continues to sink in. also watching chinese defense stocks as nato is set to liberally country a quote, systemic challenge. haidi: and we will continue to wait and see that reaction out

of beijing. certainly one to watch in the coming hours. also coming up, opus advice first says investors should invest new cash instead of sitting on the sidelines. and bp -- bnp paribas says it is time to reenter certain sectors like ev's and batteries. we were talking about these equities potentially reaching a bull market. that is it for daybreak asia. markets coverage continues. we are going to look ahead to the start of trading. bloomberg markets china open is next. this is bloomberg. ♪

yvonne: welcome to bloomberg markets china open.